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An Update on Federal Issues: ATF and Contraband Cigarettes

CDA has become aware that the Bureau of Alcohol, Tobacco and Firearms (ATF) has begun to enforce more aggressively a decades old law known as the Trafficking in Contraband Cigarettes and Smokeless Tobacco Act. This can affect all distributors, but especially those which have a cash and carry business operated from their warehouses, branches, offices, or stores.

With regard to any sale, shipment, or distribution of over 10,000 cigarettes (50 cartons) or over 500 single-unit consumer-sized cans or packages of smokeless tobacco in a single transaction at a distributor’s place of business, the distributor must obtain (and keep) the following information from the purchaser:

the name, address, destination (including street address), vehicle license number, driver’s license number, signature of the person receiving such cigarettes, and the name of the purchaser;

a declaration of the specific purpose of the receipt (personal use, resale, or delivery to another); and

a declaration of the name and address of the recipient’s principal in all cases when the recipient is acting as an agent.

This rule does not apply to duly licensed distributors who deliver to the recipient’s place of business stamped cigarettes or smokeless tobacco on which applicable taxes have been paid. This rule requiring license numbers and driver’s licenses applies when cigarettes or smokeless tobacco is bought at the distributor’s place of business.

CDA advises that ATF has advised that its enforcement of the Cigarette and Smokeless Tobacco Contraband Act is expected to expand throughout the entire United States. ATF stated that to date, its activities have been primarily centered around Virginia and North Carolina on criminal oriented activities.

ATF to date is not advising distributors in advance when it may arrive at a distributor’s business to review the records containing the information set out here. CDA will continue to monitor the situation and will advocate—-at a minimum—that the ATF advise in advance when it may visit a distributor’s place of business.